Frank Jr. first considered closing the business, according to longtime friends. Then, last December, he sold a small chunk of the complex, which covers most of a city block, to the owners of a Ninth Street butcher shop. Now, the butchers are trying to put together a group of investors to save Palumbo's.
Meanwhile, local comics and entertainers are in mourning.
"I'm very sad and upset," said comedian Lou Marks, half of the comedy team of Marks and (Dave) Michaels, which headlined Palumbo's 10 times a year.
"I love that place," Marks said. "I started there in 1943," as an 18- year-old doing a song-and-dance act with a child performer known as Tiny Becky.
"We did a jitterbug, and then we tap-danced and sang," Marks recalled. ''That place is a legend. It's been open for over 119 years. It's like home when I go there."
"I've been there 35 years," lamented orchestra leader Carmen Dee. "He (Frank Jr.) is just unhappy being in the nightclub business. It took 11 years for the kid to make up his mind that he doesn't like this business. . . . I'm hoping that someone takes it over and keeps it going."
Palumbo's has been the social and political headquarters of South Philadelphia and Italian American life since 1884, when Frank Jr.'s great- grandfather, Antonio, opened a boardinghouse catering to recent immigrants. They used to show up at the wharf off Washington Avenue wearing name tags that read "Palumbo's."
Over the years, Antonio's son, Frank Sr., built an entertainment complex that came to include a restaurant, two showrooms, four banquet rooms, three kitchens, and numerous offices and apartments.
All the top acts played there. Sinatra once sang a one-night stand there for free, as a token of affection for Frank Palumbo Sr., who presented the ''Chairman of the Board" with a brand-new Lincoln Continental after the performance.
It's the place where Jimmy Durante sang "Inka Dinka Do," where a teenage James Darren launched his career, where Sergio Franchi made old-timers cry by hitting the high notes in "Come Back To Sorrento."
But business has declined since Frank Sr. died in 1983. Since 1987, Palumbo's owners have used the property as collateral to take out more than $1 million in lines of credit from the Philadelphia Police and Fire Federal Credit Union.
Now Frank Jr., 39, a lawyer, said he has been told by Democratic political leaders that he soon will be appointed a city judge.
"I want to devote myself to being a judge," said Palumbo, a Democrat and the chairman of the city Department of Licenses and Inspections' review board. ''I hope to be endorsed by both parties."
There used to be 12 bulletin boards in the business office at Palumbo's. They listed the bookings for each month of the year. Now the boards for the months after June have been taken down. No act has been booked beyond June 12.
Fittingly, the last act booked is a Sinatra sound-alike, Billy Ruth, according to Carlton Sinclair, a booking agent for Palumbo's since 1975.
"The waitresses don't know whether to come to work or not," Sinclair said. "The place could stay open. The overhead's not high; we don't have chandeliers; the kid hasn't told anyone they're closing.
"They're just saying: Don't book anything past June."
In December, Palumbo said, he sold two of the four dining rooms to A. Esposito Inc., a firm that has supplied Palumbo's with beef and veal for 25 years. The sale price was $35,000, according to city records.
"It was just a minor sale and leaseback on a piece of real estate," Palumbo said. "I didn't think it was noteworthy."
He said that it would be up to the new operators to decide whether to continue the business as is.
"We're trying to put together a group," Lee Esposito said, "that's a good mix of investors and management people, to keep the place going."
One investor Esposito wants to include is Frank Palumbo Jr.
He also would like to keep the name Palumbo's Cafe-Restaurant.
"We don't want to do it without him," Esposito said. "There's so much good will tied to the name. . . . We certainly don't want to put a whole new image on it. We want to secure what's there and make it better."
In the Italian Market, the fate of Palumbo's is a hot topic. At Giunta Bros. Macaroni Machines, at 11th and Christian, owner Anthony Giunta is selling tickets to a May 22 dinner at Palumbo's in honor of Father Anthony D'Angelico, an assistant pastor at nearby St. Paul's Catholic Church.
Everybody who buys a ticket, Giunta said, says, "Did you hear they're gonna close!"
"I think it's a big loss," said Giunta, whose store is across the street
from the former Cous's Little Italy, another restaurant up for sale. "I was very disappointed. Unfortunately, everybody's moving out."